Creatrust > Family Office > Private Placement Life Insurance

Private Placement Life Insurance

A form of investment for Families or Private Individuals

Life insurance is considered to be a form of investment for private clients and HNWIs who wish to invest in products with a minimum of risk. Private placement life insurance is a vehicle used to protect or secure private clients and HNWIs' investments within a unique legal framework.

When the private life insurance policy is subscribed, the investment portfolio is transferred to a separate account (in the private bank of choice) solely for the life insurance policy. The portfolio will then be invested according to the investment policy chosen. The asset manager and a custodian bank are selected by the investor (also named the policy holder), with approval of the insurer. The policy holder generally gives full control of the investments to the asset manager, whose role is to oversee all investments and to be responsible for all investment decisions.

Separate account assets are segregated from the asset of the insurer. The life insurance company becomes the legal owner of the investable assets, and beneficiaries are named by the policy holder.

The Private Placement Life Insurance Solution grants several advantages and benefits to Private clients and HNWIs:

Bonuses are paid in cash or as a transfer of securities
Freedom to nominate beneficiaries
Flexibility in the choice of investments: investment vehicles, listed or non-listed companies, holding companies, family holdings
Gold and metals are also eligible and can be linked with the Luxembourg Freeport, where they will be stored
The policy holder only has to pay income tax on the proceeds of the policy as he is no longer considered to be the owner of the assets
Non-resident subscribers also benefit from inheritance tax advantages, income and capital gains tax advantages

Because the life insurance company is registered as the owner of the assets, the privacy of the policy holder is guaranteed.

Finally, it is also possible to introduce into such a life insurance policy certain hard assets such as real estate, participations in companies, co-investment, intellectual property rights, villas, boats or planes, which can be transformed into securities by the use of securitisation.